Silver Value

Uses of Silver

The use of silver as a precious commodity has been used since ages, dating back to the Sumerian Empire and today the silver value has increased manifold, due to the increasing industrial demands. Silver is used in many fields such as photography, jewelry and in various industries. It is traded through the forex market, where one can invest in it in several forms. The price in these financial markets is mentioned in troy ounce. The demand for silver is on a continuous upward trend and people are continuing to invest in it, as it provides a form of protection against inflation.

Today, silver in photography is declining due to digital photography but the use in electrical appliances as also in clothing and medicine is increasing. There are also other new uses of silver in RFID tags, food hygiene and so on which is making it more in demand and thus increasing the value of silver in the market.

Silver vs. Gold

For many years, silver has been considered as a great form of investment and was also used as legal tender and a standard for currency. The prices of this precious metal keep fluctuating in the financial market on a day to day basis. This is due to various market influences of demand and supply, as also the amount of speculation going on. However, one should realize that the liquidity of silver is a little less than gold. As silver is used for being stored due to its value, which is similar to gold, the price of silver often follows the gold trend, though with a varying ratio. Any investor or trader needs to analyze the trends and study the history of the prices in order to correctly assess silver value at any given point of time.

Ratio between Silver and Gold

The silver and gold ratio usually follows a regular pattern, such as 1:20, which means that one troy ounce of gold is equal to 20 troy ounces of silver and if the ratio number reduces, it means that the silver value is increasing compared to gold. When compared to gold, the turnover in the silver market is smaller as the London silver bullion market has a turnover which is about 18 times less in terms of money. Traders can also influence the price of silver by cornering the market and thus leading to a rise in the price and bringing down the ratio of gold vs. silver. Investors can use silver as a hedge against changing economic situations, such as inflation, deflation or in case the currency of a country is devalued.